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svetoff [14.1K]
3 years ago
8

Southern Tours is considering acquiring Holiday Vacations. Management believes Holiday Vacations can generate cash flows of $218

,000, $224,000, and $238,000 over the next three years, respectively. After that time, they feel the business will be worthless. If the desired rate of return is 14.5 percent, what is the maximum Southern Tours should pay today to acquire Holiday Vacations?
Business
1 answer:
Pepsi [2]3 years ago
7 0

Answer:

$519,799.59

Explanation:  

Discount rate = R = 14.50%

Year    Cash flows     Discount factor     PV of cash flows

1            218,000.00          0.873362            190,393.0131  

2           224,000.00          0.762762           170,858.6793

3           238,000.00          0.666168            <u>158,547.9011</u>

          Total of PV = NPV =                           <u> $519,799.59</u>

<u />

Note:

Df = 1/(1+R)^Year

PV of cash flows = Cash flows x Df

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Answer:

310-10-50-8

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Explanation:

Accounting standards codification is the source of authoritative generally accepted accounting principles (GAAP) recognized by the FASB to be applied to non governmental entities.

6 0
3 years ago
A U.S.-based importer, Zarb Inc., makes a purchase of crystal glassware from a firm in Switzerland for 39,960 Swiss francs, or $
IRINA_888 [86]

Answer:

e. $638

Explanation:

payment to be made as per forward contract (IN $)

= 39960/ 1.682  

= $23757.43  

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loss by hedging = $24395.6 - $23757.43  

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Therefore, The U.S. firm have saved or lost $638 in U.S. dollars by hedging its exchange rate exposure.

4 0
3 years ago
Bruno Fruscalzo decided to start a small production facility in Sydney to sell gelato to the local restaurants. His local milk s
Sholpan [36]

Answer:

A. 4500kgs

B. 15.4orders

(c)

The order size should be the economic order quantity which is computed as:

Q = (2.d.K / h)1/2 = sqrt(2*9000*20 / 0.03) = 3464.1 kg

(d)

If Q = 3000 kg,

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(e)

If Q = EOQ = 3464.1 kg

Total cost of ordering + carrying = (12d/Q) * K + (Q/2) *12h = (12*9000/3464.1)*20 + (3464.1/2)*0.03*12 = $1,247.1

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If Q = 6,500 kg,

Total cost of ordering + carrying = (12d/Q) * K + (Q/2) *12h = (12*9000/6500)*20 + (6500/2)*0.03*12 = $1,502.3

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If Q = 20,000 kg,

Total cost of ordering + carrying = (12d/Q) * K + (Q/2) *12h = (12*9000/20,000)*20 + (20,000/2)*0.03*12 = $3,708

So, per kg cost = 3708 / (9000*12) = $0.034

Explanation:

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4 years ago
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kirill [66]

Answer:

Explanation:

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Legitimate business means a bona fide, active and operating commercial or business entity, or a government agency, charitable institution, or other duly recognized non-profit organization that produces services or goods for profit. I mean

Legitimate Business Reason means a party's compliance with contractual obligations and applicable laws and regulations, including but not limited to data protection, in connection with any action by a party. increase.

Legitimate business interests include valuable and confidential business information, material relationships with specific prospective or existing customers, customer goodwill related to ongoing business, and professional training. increase. identification.

Learn more about legitimate business here: brainly.com/question/24553900

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